Weekly Economic Snapshot 9/5 - 9/8

Economic Facts for this Week

• Corporations pay an effective corporate tax rate of 13-19 percent, far below the 35 percent statutory rate. This gap results from numerous loopholes in the code for corporations to avoid and defer taxation—often indefinitely.
• Proposed tax cuts for pass-through income masquerading as a boon to small businesses would really be a boon to President Trump and his cronies: Under the Trump plan 68 percent of the benefit would go to millionaires, and under the House GOP proposal 79 percent would go to millionaires.

Chart of the Week

 

While the American people have yet to see a real tax reform proposal from the Trump administration, even after the President’s tax rally in Missouri last week, the broad principles the administration outlined earlier this year makes clear who their policy will prioritize helping: millionaires and billionaires. Recent analysis from the Institute on Taxation and Economic Policy finds that the 0.5 percent of tax filers people who earn more than $1 million would receive 49 percent of all new tax cuts, at an average cut of $217,790 in 2018, while the middle class with incomes between $45,000 and $200,000, who make up nearly half of all tax payers, would receive less than one quarter of the cut. Whereas millionaires and billionaires would see a tax cut bonus worth 7 percent of their vast pre-tax income, middle class families would receive a cut of just 1.5 percent of their income. ITEP’s analysis also provides a local breakdown of Trump’s proposed tax cuts in your state.

 ICYMI

• The increasing concentration of market power in a small number of big corporations is taking a toll on consumer pocketbooks and the overall economy. Today companies charge an average 67 percent price mark-up over cost compared to 18 percent in 1980.
• The prices of generic pharmaceuticals, seen as key to controlling health care costs, are rising as more markets are concentrated in just one or two companies; for 40 percent of generic medicine markets only one supplier exists.
• Most households benefitting from supplemental nutritional assistance (SNAP) are severely cash-strapped and unable to absorb losses of more than $2-3 per child per week in assistance, often forcing families to skip payment of regularly recurring family expenses, threatening families with already precarious financial positions.

Coming This Week

• Wednesday 8:30am: U.S. International Trade in Goods and Services for July 2017 - https://www.bea.gov/newsreleases/news_release_sort_international.htm
• Thursday 8:30am: Productivity and Costs for second quarter 2017 - https://www.bls.gov/news.release/prod2.toc.htm